Contact: Gordon Shinn, Head of Finance, ext: 7526, e-mail: [email protected]

1 Summary

1.1 This report proposes the capital programme for 2004/05 to 2007/08 (shown as Appendix 1).

1.2 Prior to the Executive Member considering the capital programme, this report is being presented to the Social Care Policy Review Committee to provide the Committee with the opportunity to comment to the Executive Member on the proposals.

2 Introduction

2.1 The Cabinet at its meeting on 15 December 2003 asked Executive members to prepare proposals for:

· a locally-resourced capital programme for the four-year period from 2004/05 to 2007/08 within the guidelines of the current capital programme adjusted for inflation

· capital schemes supported by Government approvals in the form of grants or Government supported borrowing in 2004/05 and those expected to be supported in 2005/06, 2006/07 and 2007/08

· possible capital projects which might be suitable for the private finance initiative (PFI) revenue support from the Government for 2004/05 to 2006/07, subject to further reports on the outline business case for each scheme and the Government support being available.

2.2 For this service, the guidelines for the locally resourced programme are:

2.3 The guidelines include an addition of 2.5% for inflation, in line with the non-pay inflation assumption for the revenue budget.

2.4 Executive members may vary these guidelines between years provided their total four-year guideline is not exceeded and bunching of payments in any one year or front-loading are avoided.

2.5 Executive members may propose supplementing their capital guidelines under the `prudential framework' agreed by Cabinet at its meeting on 24 November 2003, thereby integrating more closely decisions on revenue and capital spending in support of Corporate Aims. The additions may include:

· virement from the Executive member's revenue budget

· temporary unsupported borrowing, to provide bridging finance in advance of capital receipts or other contributions, with the cost of servicing the unsupported borrowing in the interim being met from the Executive member's revenue budget.

2.6 In addition, Executive members may propose additional schemes funded from:

· use of Executive member's share of capital receipts obtained in 2002/03 as allocated by the Cabinet in July 2003 (if not already used for the 2003/04 programme)

· anticipating their share of capital receipts obtained in 2003/04 provided the receipt has actually been received.

3 Capital programme 2004/05 to 2007/08 - locally resourced schemes

3.1 The proposed programme of funding of schemes within local resources consists of `block' allocation at the minimum level necessary to deal with the most urgent Health and Safety and other statutory requirements. These allocations cannot support any major capital works and are becoming increasingly restricted to the most urgent items. The possibilities of transferring up to £500,000 of these budgets to revenue in 2003/04, in order to help prevent a possible overspend, means that even tighter management is required.

3.2 Other major schemes will have to be financed by other means such as Policy and Resources Built Estate programme, use of capital receipts, joint working with Health, credit approvals linked to the Public Service Agreements, Private Finance Initiatives or the new prudential framework referred to above.

3.3 The department is preparing proposals for consideration under the prudential framework. This includes the development of a `service centre' approach under the e-government initiative and home care rostering and work tracking systems. Proposals will be submitted to the Executive Member for Social Care in due course.

3.4 There are other corporate systems developments that are essential to Social Services business. It is understood that the development of `Business Warehouse' in SAP will be financed corporately.

3.5 The department's non-residential charging computer system also needs replacing in 2004/05 (at an estimated cost of £0.2m), as otherwise no system will be available when the mainframe closes down. If it is not replaced, income of over £3m per year will be lost. If possible, capital resources will be found through identifying or generating capital receipts. If not, this will have to be met from the revenue budget as an additional pressure.

4 Capital programme 2004/05 to 2007/08 - schemes supported by Government approvals

4.1 Two schemes will be supported by government approvals for 2004/05 and 2005/06: Information management (£385,000 each year) and Children's Information Technology (£136,000 each year). The Information Management scheme links to Aim 5 of the Corporate Strategy of `Improving Services' as it will allow the department to develop SWIFT (the new care management system), so management information is improved to enable service provision to be improved whilst producing efficiencies. The Children's Information Technology scheme links to corporate aim 1: Maximising life opportunities and in particular improving the educational attainment of young people in care.

4.2 The Executive Member, Policy and Resources approved the SWIFT project in April 2002. The project is due to be completed in 2004/05 at a total cost of about £6m. It will replace the current Social Services systems held on the mainframe and extend the care management system to cover childrens' services fully. The current estimated funding shortfall is £1m, which will need to be found from either the Social Services capital programme or elsewhere. Pressures on the revenue budget mean there is little potential to meet it up front from that source.

4.3 £1.8m of the total costs has already been funded through unsupported borrowing approval obtained through the County Council's Public Service Agreement. It is hoped to repay this through reward grant, but insofar as this is not achieved, repayment would be from the Social Services cash limit. It would therefore be appropriate to extend this approach by taking out unsupported borrowing of an additional £1m which would then fall to be paid back from the Social Services cash limit over the next five years.

5 Partnership working with Health

5.1 As reported previously, a £60 million scheme is being progressed with Health colleagues for the provision of 500 new nursing beds to maintain capacity and help meet future demand. £40 million of this is being funded via the Strategic Health Authority whilst the balance of £20 million will be funded by the County Council.

5.2 These new facilities will start to come on stream during the second half of 2004/05, with an estimated additional 180 nursing beds available for use by the end of March 2005. Implementation costs and running costs are included in the 2004/05 revenue budget proposals.

6 Private finance initiative schemes

6.1 Discussions have taken place with regard to the possibilities of schemes suitable for PFI projects. These include:

· specialist residential accommodation for children with severe behavioural difficulties; and

· joint service centre - multi-agency, multi-service premises. A `LIFT' project is being looked at as a possibility in the South East of the County.

6.2 Reports will be brought to the Executive Member for Social Care and to the Social Care Policy Review Committee if it is proposed to proceed with them.

7 Capital Programme Summary

7.1 On the basis of the position outlined above, the total value of the capital programmes submitted for consideration for the four years to 2007/08 are:

7.2 At this stage the proposal for the extra £1m unsupported credit approval for the SWIFT project is excluded pending Cabinet approval.

8 Revenue Implications

8.1 The revenue implications of the proposed capital programme are as follows:

9 Recommendations

It is recommended that the Policy Review Committee advise the Executive Member for Social Care to recommend to the Cabinet that the following be approved:

1 That the capital programme for 2004/05 to 2007/08 as set out in Appendix 1 be approved for submission to the Cabinet

2 That the Cabinet be asked to agree (subject to submission of an appropriate business case) an unsupported credit approval of £1m to fund the SWIFT development

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

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